Nov 27, 2011

The New Age Broker

Enter the new age broker
Posted: Sat, Nov 26 , 2011
The real estate brokers are the cornerstone of the real estate industry in India.
They are the front end of the business, the first point of contact for the
customer. It is they who hold the pulse of the market.
Their importance notwithstanding, the general perception of the real estate
broker is one of mistrust. “He is the last guy you can trust,” used to be the
common refrain. That was probably true in the 80’s . Times have changed and
indeed for the better. Today, the real estate broker has undergone a
transformation.
CHANGING GAME
This transformation in the real estate brokerage scene in India has been driven
by many factors. First, the opening up of the economy and influx of
international companies into India has brought about a major demand
turnaround in real estate services. That has in turn translated into demand for
real estate brokerage services that have best practices benchmarked with the
best in global standards.
Second, the growth of information technology has brought about a revolution in
the way business is conducted. Internal business processes could be completely
automated to suit ease of working.
Third, the volumes of transactions and consumer preference and choice
demanded that systems be developed so that the customer can search, view and
select from the comfort of his home. Inputs for decision making had to be made
more comprehensive and at the same time, simple.
Fourth, the relaxations and incentives for investments by the NRI and PIO
market led to the emergence of a new demand where it was not practically
possible for international clients to physically travel and see the properties before
making the decision to purchase. This was where IT- enabled solutions came to
their rescue.
One additional factor has been that there were quite a few international property
consultants who made inroads into the highly disorganised brokerage industry in
the country and started providing high quality services, backed by mandates.
This made the local broker look up and start to address the growing competition
from corporate brokers.
All these factors have led to domestic brokers waking up to the need to get their
act together, if they wanted to remain in business.
They started out on a series of measures. Some were simple, such as sprucing
up their offices. Websites started mushrooming. Listing properties on the
internet became a common practice. They increasingly started resorting to e-
marketing. Brokers started streamlining their internal processes.
They have next paid attention to the softer side of the game. The attire and the
technique of communication started changing. Brokers started attending classes
and signed up for a range of courses from personality development to principles
and practice of global real estate business. Increasingly, the brokerage industry
has witnessed the entry of highly qualified professionals. From the image of the
broker we encountered at the beginning of this article, the broker today may well
be an engineer, MBA, advocate, retired personnel, chartered accountants among
others. Well- educated women too, are choosing this as a career option.
These factors are slowly, but surely transforming the real estate brokerage
industry. The makeover is for real. The new-age broker has arrived.
Most corporate clients can avail the services of international property
consultants for whom clients are not really a problem as they came from
international referrals. Individual customers, however, had no option but the
local untrained broker to deal with. This demand for quality is now being filled by
the new-age local brokers, who are home-grown, but equipped and skilled to
provide the best in quality standards and customer satisfaction.
The new age broker is there for the discerning customer; he is there to hand-
hold, guide, advise and take the customer through the entire process of making a
property purchase decision in a transparent, thorough and clean manner. The
customer does not really mind paying a fee for good quality service and
assurance. The property transaction experience thus becomes an enjoyable one.
ORGANISING THE PRACTICE
To enable the growth of the brokerage industry, it is necessary to institutionalise
best practices. In pursuit of this goal, the National Association of Realtors —
India (NAR -India ) has been formed as the apex national level association for
realtors in India.
The association has a member- coverage in 25 cities in the country and aims to
nurture, incubate and groom new-age brokers who can provide
quality service and customer satisfaction. The objectives are to empower and
enable brokers to acquire skills and
emulate best practices.
NAR- India has a strategy of ensuring that all the member- brokers acquire basic
real estate education so that the interest of the customer is not jeopardised. The
association through its programmes grooms and prepares the local broker for
the international market on the one hand, and brings international standards and
business practices to the local real estate market on the other.
The association has been striving towards standardisation of business practices.
Members are bound by a Code of Ethics and follow modern standardised
business practices. The orientation of the whole exercise is that the customer
comes first. It is also pursuing the objective of bringing about a multiple listing
service (MLS), something common to most evolved markets, in order to enhance
business efficiency. Simply put, the MLS is a bouquet of services that
accumulates and disseminates listing information among broker participants.
Members follow standard globally accepted practices of servicing so as to ensure
transparency in the transaction process. NAR- India is also working on advocating
Exclusive Mandates and ‘One side representation’ for the benefit of the
customers. One side representation is where the broker declares whom he is
representing: the seller or the buyer.
The association has also taken steps to educate brokers and facilitate the
upgradation of their skills. NAR- India's three-pronged strategy comprises: a) a
basic real estate member entry test or REMET, b) a higher level real estate
programme and c) an advanced course on principles and practice of real estate.
Members are being encouraged to take up education and skill upgradation
programmes on a continuing basis.
REGULATION
The association strongly advocates government regulation of the brokerage
business. In most evolved real estate markets, brokers are ‘Licenced to Practice’,
through education and adherance to standards as in the case of other
professions such as law, medicine, architecture or chartered accountancy. In the
absence of such a regime, any person is free to enter the profession and that is
one of the principal reasons why the real estate industry is so murky. It is
unfortunate that the just-released draft Real Estate Regulation Bill does not
recognise the importance of brokers to the real estate industry and the need to
have a healthy brokerage practice.
The National Housing Bank (NHB) , the regulator for housing finance in India has
developed RESIDEX, the first- ever national housing price index. NAR- India has
signed a Memorandum of Understanding with the NHB to provide key inputs for
the formulation of this index.
These measures that the association has initiated, are geared towards achieving
the twin objectives of enhanced service quality and greater transparency. If
these best practices are disseminated effectively, then real estate brokerage can
well be another flourishing sector within the services sector and can provide
employment to millions in our country.
As the real estate industry comes of age, more individuals are taking to the
business of property brokerage seriously as a career option. So long as the new
age brokers adhere to the good old principles of honesty, sincerity,
transparency, clean dealings, due diligence and a 'customer first' attitude, there
is a lot of money to be made in this business.
It is high time the government recognises the significance of the real estate
brokerage industry in India. It has to ensure their greater involvement in
decision making on key issues and make policy more meaningful and inclusive.

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